BP Plc has agreed to buy U.S. shale oil and gas assets from global miner BHP Billiton for $10.5 billion, expanding the British oil major’s footprint in oil-rich onshore basins in its biggest deal in nearly 20 years.
As Reuters reports, the acquisition marks a turning point for BP since the Deepwater Horizon rig disaster in the Gulf of Mexico in 2010, for which the company is still paying off more than $65 billion in penalties and clean-up costs.
The deal is also BP’s biggest since it bought oil company Atlantic Richfield Co. in 1999. The purchase will increase BP’s U.S. onshore oil and gas resources by 57%. BP will acquire BHP’s unit in Haynesville in northwest
Louisiana in addition to Eagle Ford and Permian Basin assets in Texas, giving BP “some of the best acreage in some of the best basins in the onshore U.S.,” the company says.
BP outbid rivals for the deal, including Royal Dutch Shell and Chevron Corp. for the assets. Shell and Chevron have a combined production of 190,000 barrels of oil equivalent per day and 4.6 billion barrels of oil equivalent resources.
Meanwhile, another big oil player, Exxon, has just completed one of its worst quarters in a decade, Bloomberg reports. Exxon not only failed to live up to earnings expectations but also delivered its worst production performance since 2008 and offered no new payouts to shareholders.